c) Southern California Water Co. does not support San Gabriel's argument that proceeds from a groundwater contamination settlement are subject to Public Utilities Code section 789 et seq.
San Gabriel cites Southern California Water Co. for the proposition that contamination damage claims are "part and parcel" of the value of real property when sold and that the proceeds of such sales are subject to Public Utilities Code section 789 et seq. (SG Reh. App., pp. 11, 12.) This holding from Southern California Water Co. explicitly refers to a situation in which damage claims were "part and parcel of the sale" of the water rights. (Southern California Water Co. [D.04-07-031], supra, at p. 9 (slip op.).)
In the instant case there was no sale of real property or water rights. However, San Gabriel cites Southern California Water Co., apparently as support for its claim that discharging contaminants, even when there is no accompanying sale of the affected property, constitutes inverse condemnation. Related to this argument, San Gabriel claims that the settlement proceeds at issue here are subject to reinvestment in utility plant pursuant to section 790. Because there was no sale in this case, reliance on Southern California Water Co. is misplaced and the argument is without merit.
San Gabriel notes that we designated the Phase Two gain on sale proceeding to consider, among other things, whether inverse condemnation is equivalent to a sale. (SG Reh. App., p. 12.) However, we did not designate the proceeding to consider a situation such as that of the Mid-Valley Landfill settlement situation, which involves damages paid for water contamination when there is no sale. As noted above, we specifically excluded from the rulemaking, "[s]ettlement proceeds paid to water utilities in connection with contamination of water supplies."(Gain on Sale Decision [D.06-05-041], supra, at pp. 70, 91, Finding of Fact (FOF) 44 (slip op.).)
Consistent with this, in D.07-04-046, we rejected San Gabriel's argument that contamination of its water supply constituted inverse condemnation and that the proceeds from the settlement are subject to reinvestment in utility plant pursuant to section 790. We dismissed the claim, saying:
San Gabriel's argument is without merit. Its contamination lawsuit was a claim for damages; the settlement damage payment was not a sale of real property nor did it result in a sale.
In the case before us there is no sale of water rights (or any other property.)
(D.07-04-046, p. 82.) San Gabriel's claim of error related to this holding is without merit.
San Gabriel also challenges our statement:
San Gabriel's ratepayers have paid maintenance, depreciation and return on facilities made useless by the contamination.
(SG Reh. App., p. 10, citing D.07-04-046, p. 82.) San Gabriel questions the Decision's statement that facilities were made useless by the contamination, saying:
The Decision does not specify to what facilities it refers, but the only facilities "made useless" by the Mid-Valley Landfill were restored to use by the installation of wellhead treatment facilities constructed by San Gabriel at Plant F-10 . . . .
(SG Reh. App., p. 11.) San Gabriel witness Whitehead stated in prepared testimony that the County "had in effect taken the company's property by causing some of the company's wells and water rights to be rendered useless because of high levels of VOC groundwater contamination . . . ." (Ex. 17, p. 15 (Whitehead/San Gabriel).) Further, the Decision notes that San Gabriel said no plant assets had to be retired because of the water contamination. (D.07-04-046, p. 80, emphasis added.) The challenged statement in the Decision is consistent with San Gabriel's own testimony and does not require further clarification. The claim of error is without merit.
